A Penny for your Thoughts
Today marks the first official day without our beloved Canadian penny. As of today, stores will be allowed to round up, or down, for your cash purchases that have any number other than zero that is two spots to the right of the decimal point.
The Royal Canadian Mint will no longer distribute pennies as of February 4, 2013. In phasing out this coin, it is estimated that the taxpayers will save$11 million dollars per year.
Pennies can still be used in cash transactions however only with businesses that choose to accept them. Yep, that means if you want to buy something from your local store, they do not have to take your pennies as partial payment for your cup of coffee or whatever it is that you are purchasing.
The Rounding Guideline
The Canadian Government is adopting a rounding guideline that has been used successfully by other countries that have chosen to phase out their one cent coin. Final prices that end in a 1, 2, 6 or 7 should be rounded down to the nearest 5 cents. Prices ending in 3, 4, 8 or 9 should be rounded up.
But here’s the kicker: retailers do not have to follow this guideline that is supposed to make things fair for consumers. When you head off to your local coffee shop or hair salon, they can choose to always round up if they want. Want to bet most retailers will do just that?
Other methods of payment
When you are using a cheque, debit card or credit card – any form of payment other than cash – the transaction will not be subject to rounding guidelines. These types of payments can be settled to the exact amount and do not need to be rounded.
As a consumer, I suggest that we all need to be vigilant over the next little while. If you don’t normally pay attention at the cash register when you are making purchases, now is the time to start. Make sure that all items are being rung in correctly, and when your final total is presented to you, ensure that the retailer is not trying to get you to pay more than you need to. Make a little card to carry in your coin purse or wallet so you know that totals ending with 1, 2, 6, and 7 round down; totals with 3, 4, 8, and 9 round up. Then write CASH TRANSACTIONS ONLY along the bottom.
How Can This Save Me Money?
If, in a typical month, you make a total of 75 transactions total, either using cash or another method of payment, you could be paying 0.01 to 0.04 more per purchase if the retailer you deal with always chooses to round up. Potentially, that could be $3 more out of your budget than you are used to spending. If your monthly transactions total more than 75, this dollar amount could be much higher. Now $3 per month doesn’t seem like a lot, but that is $36 dollars per year. Over time, that adds up to a lot of money that was unnecessarily spent. Wouldn’t you rather keep that money in your pocket?